In the R&D supply chain firms can agree an inbound alliance at different times alongthe process; this decision will impact the supplier’s effort and then the innovation achievedat the end of the agreement. Supplier’s effort is assumed as non-observable then it cannotbe constrained contractually. Earlier contracts will ask for a greater cumulated effortalthough they offer risk-sharing opportunity; later contracts see supplier with a stronger exantebargaining power position, due to shorter (and then less risky) contract length andexperience acquired in the previous period in her own. With the hypotheses of maximuminnovation value achieved when both partners exert the maximum affordable efforts andvon Thünen’s research production function, later contract allow to target a higher value ofinnovation when one of the partner is in charge of the explorative burden of the researchand she wants to maximize her payoff.
|Number of pages||15|
|Publication status||Published - 2015|